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Japan PM pledges to slash red tape for growth

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(Globalpost/GlobalPost)

Japan's premier said Friday he would slash red tape in a bid to boost corporate investment as he seeks to capitalise on the feel-good mood of a soaraway stock market and a plunging yen.

Prime Minister Shinzo Abe set out broadbrush outlines of the third of his "three arrows" of a plan dubbed "Abenomics", which is intended to turn around years of deflation in the world's third-largest economy.

The first two "arrows" -- a colossal government spending plan and aggressive monetary easing -- have fuelled optimism in an economy that has struggled for two decades.

Tokyo's main index, the Nikkei 225, has shot up around 70 percent since late last year as a mood of optimism has gripped Japan and the once-painfully strong yen has shed around a quarter of its value.

Critics say thus far there has been precious little substance and the head of steam has been built on hope, with an economy still hide-bound by regulations that strangle investment and stymie competition.

Abe gave away little in the way of actual policy measures on Friday before an audience of academics and businessmen, but said he intended to make life easier for companies.

"I will set the next three years as the period to promote investment... and will remove all the factors that deter domestic investment, taking comprehensive measures, such as reviewing the tax system, budget, finance, regulational reform, and setting up new systems," he said.

The premier said private investment in Japan in the last fiscal year stood at around 63 trillion yen ($615 billion), 10 percent lower than it was before the Lehman shock.

"Now is the time to release the third arrow to stimulate the corporate investment mindset," he said.

"With that, I would like to recover capital investment to 70 trillion yen, which was the level of private investment seen before the Lehman shock."

In a speech that was short on details, Abe said he wanted to triple foreign sales of Japanese infrastructure to 30 trillion yen by 2020.

"I will visit wherever in the world if time allows me, to try to make sales at the very highest level," he said, adding he would be in Myanmar later this month.

Japan's ageing farmers, a key constituency for Abe's conservative Liberal Democratic Party, also got a mention, with plans to double agricultural exports to one trillion yen.

"In the next 10 years I will draft and implement plans to double income of agricultural households and villages," he said.

The carrot of sales abroad is meant to offset what farmers feel is the big stick of the Trans-Pacific Partnership, a huge free trade deal that Abe says he wants Japan to join.

Farmers traditionally struggle to compete globally and their high prices are protected at home by sometimes jaw-dropping tariffs -- rice imports attract a nearly 800 percent premium.

Abe said last month his government would work on expanding business opportunities for women and providing job training for young people.

Experts have long argued that the country must bring more women into the workplace to broaden the male-dominated, shrinking labour market, which is being hit by retiring babyboomers and a falling birthrate.

Since his December election victory Abe has surprised many with an economic pragmatism that has borne fruit, reversing his image as an out-of-touch nationalist from a political family.

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http://www.globalpost.com/dispatch/news/afp/130517/japan-pm-announce-new-growth-plans